Annual Redemption (Retraction) Feature for Closed-End Funds

Annual Redemption (Retraction) Feature for Closed-End Funds:  The ability to sell closed-end fund units back to the fund on an annual basis. The calculation of the proceeds to be paid to the unitholder is defined in the fund’s initial public offering prospectus.  Annual redemptions usually require a pre-determined notification period.  Typically there are no direct costs to the holder to utilize an annual retraction feature, although the fund manager may allocate some costs to the redeeming holder.